Extending ridge around part of an object
If you can live with the awful topology of the mesh here are the rough steps to accomplish modeling that ridge:

Lets start by sanitizing the mesh first 


Select these vertex and move your 3D cursor there with Shift + S Cursor to selected





Exit edit mode and move the center of the object to the cursor with Shift + Ctrl + Alt + S > Origin to 3D cursor
Now that your Arm object has a sane center move it to the scene's origin (coordinate 0,0,0)


Now lets make the object symmetrical


Add a vertical plane at the object/scene origin





Scale it so it reaches the whole object
With both selected enter edit mode on the arm object, and in top view use the operator Knife Project to cut your whole geometry in half. Use the option cut through for best results
Now delete half of the mesh, making sure you delete all the small faces along the symetry axis





Now you can add a mirror modifier to the object so you only have to deal with half of the mesh and model part of it. Blender will take care of the symmetry


Modeling the ridge


Now delete this part of the mesh






Select the border of the round part an duplicate it with Shift + D





Scale in inwards towards the cursor by pressing . then S to scale and Shift + Z to keep it from scaling in Z direction
Separate the scaled edges into a new object with P
Now use the Knife Project as described above with the plane to cut it into the mesh
Enter edit mode again and you can select these faces





Extrude them until they reach the desired height





Exit edit mode and add a new plane at exactly the height of the top of the round part





Scale it so it covers the whole object and use knife project again to cur a new loop on the mesh





You can now bridge these edges with F and start closing your geometry





Extrude the sides up. Make sure the surrounding vertex are vertically aligned with the remaining ones so they lign up





Done